Potash Corp (NYSE:POT) CEO Bill Doyle said he sees the price of potash reaching a minimum of $600 a ton by 2013, as the increasing price of agricultural commodities may push farmers to boost production, which would in turn increase the demand for potash, and other fertilizers.
As the ongoing debacle over the BHP (NYSE:BHP) bid winds down, it's hard to trust anything Doyle says though, as his irrational and sometimes, childish, response to the bid, has caused him to be lowered in the eyes of many people and institutions.
In other words, even this assertion could be considered a ploy to affect the decision by the Canadian government on whether or not to allow the bid by BHP for Potash to go foward.
That's because Doyle has been attempting to make it look like Potash is far more valuable than the bid by BHP because of future, but unproven, projections of potash prices.
This doesn't mean there isn't a real support for potash prices moving up, just that the motives for Doyle expressing them are suspect.
Doyle concluded, "In my estimation, by 2013 you are going need prices free-on-board-mine of at least $600 to get to a level that you could get a 10% internal rate of return on a mine.
"And it's a ten year process, [so] you are going to need to move somewhere in that 2013, 2014 timeframe to have enough material available in the 2023/24 time level.
"So we certainly have the pricing power at the moment, and I see that
continuing for the next few years."
In the latest quarter of the company potash prices had average $305.60 a ton.
Showing posts with label Bill Doyle. Show all posts
Showing posts with label Bill Doyle. Show all posts
Friday, October 29, 2010
Friday, October 8, 2010
The Potash (NYSE:POT) Shareholders Strike Back
Angered at what could be perceived as arrogance by the board of directors of Potash Corp. (NYSE:POT), a group of shareholders have sued the board for not taking into account their interests, and rather were serving their own interests.
In a class action lawsuit filed by Richard and Susan Painter and Herbert Francl in the U.S. District Court of Illinois, it stated:
“The board adopted the poison pill to entrench incumbent directors and management of Potash and prevent BHP (NYSE:BHP) from acquiring the company without the consent of the board.
“The individual defendants, the directors of the company, have served their own interests before those of Potash shareholders and acted oppressively and in a manner that unfairly prejudices and disregards the interests of shareholders.”
Listening to the remarks of Potash CEO Bill Doyle, and others, their remarks could come back to haunt them, as it definitely gave the appearance they weren't interested in the shareholders but their own jobs.
Since they're on record, there's a lot that could be used against them in a court case.
Most people without any skin in the game, including a report from the Conference Board of Canada, which was commissioned by the government of Saskatchewan, say over the long term it would probably be beneficial to Canada, although possibly over the first 10 years there could be up to $2 billion in royalties lost. Not much in the overall scheme of things.
There can be no doubt this would benefit the province, although that isn't a reason for the deal to go forward. Extracting all the royalties from the company to pay for socialist programs and wasteful government spending isn't what business is for.
This is about a company that likes to compete wanting to produce potash at it's own pace, and not via the Canpotex cartel which essentially fix prices, an illegal act in the U.S.
Mosaic (NYSE:MOS) and Agrium (NYSE:AGU) are the other members of the monopoly, and they work together to directly decide how much fertilizer to produce and what the price to charge should be.
The government of Saskatchewan is evidently clueless as to how turning over more potash at lower margins would create probably more revenue than keeping prices high and generating less sales.
It's the Wal-Mart (NYSE:WMT factor at work. They make so much money because they keep their costs low and turn over inventory over and over again. That creates huge profits even though they have lower margins at times.
Anyway, this was a no-brainer as far as the lawsuit. Most of the arguments attempted to be made from Potash and their leadership don't make sense, other than asserting sometime in the future they're really going to be a big company again and worth a lot more than they are.
That argument could be made by any company of course.
Bottom line. Potash has been acting arrogant and resisting the deal in a way that at minimum does give the appearance of self interest. It may cost them before it's over, as they've done nothing but throw out gigantic numbers as to what they're allegedly worth, rather than try to work things out with BHP.
In a class action lawsuit filed by Richard and Susan Painter and Herbert Francl in the U.S. District Court of Illinois, it stated:
“The board adopted the poison pill to entrench incumbent directors and management of Potash and prevent BHP (NYSE:BHP) from acquiring the company without the consent of the board.
“The individual defendants, the directors of the company, have served their own interests before those of Potash shareholders and acted oppressively and in a manner that unfairly prejudices and disregards the interests of shareholders.”
Listening to the remarks of Potash CEO Bill Doyle, and others, their remarks could come back to haunt them, as it definitely gave the appearance they weren't interested in the shareholders but their own jobs.
Since they're on record, there's a lot that could be used against them in a court case.
Most people without any skin in the game, including a report from the Conference Board of Canada, which was commissioned by the government of Saskatchewan, say over the long term it would probably be beneficial to Canada, although possibly over the first 10 years there could be up to $2 billion in royalties lost. Not much in the overall scheme of things.
There can be no doubt this would benefit the province, although that isn't a reason for the deal to go forward. Extracting all the royalties from the company to pay for socialist programs and wasteful government spending isn't what business is for.
This is about a company that likes to compete wanting to produce potash at it's own pace, and not via the Canpotex cartel which essentially fix prices, an illegal act in the U.S.
Mosaic (NYSE:MOS) and Agrium (NYSE:AGU) are the other members of the monopoly, and they work together to directly decide how much fertilizer to produce and what the price to charge should be.
The government of Saskatchewan is evidently clueless as to how turning over more potash at lower margins would create probably more revenue than keeping prices high and generating less sales.
It's the Wal-Mart (NYSE:WMT factor at work. They make so much money because they keep their costs low and turn over inventory over and over again. That creates huge profits even though they have lower margins at times.
Anyway, this was a no-brainer as far as the lawsuit. Most of the arguments attempted to be made from Potash and their leadership don't make sense, other than asserting sometime in the future they're really going to be a big company again and worth a lot more than they are.
That argument could be made by any company of course.
Bottom line. Potash has been acting arrogant and resisting the deal in a way that at minimum does give the appearance of self interest. It may cost them before it's over, as they've done nothing but throw out gigantic numbers as to what they're allegedly worth, rather than try to work things out with BHP.
Thursday, October 7, 2010
Potash (NYSE:POT) CEO Presses for $170 a Share to Sell Company to BHP (NYSE:BHP), or Anyone
Potash Corp. (NYSE:POT) chief executive officer Bill Doyle said in an interview with Canadian media outlet The Globe and Mail, that the value of Potash “far exceeds $170 per share," way above the current offer of $130 a share from BHP Billiton (NYSE:BHP).
The bid by BHP puts a value on Potash of $38.6 billion. Doyle said in the interview that the bid was a "non-starter."
Doyle added, “When you think about this company being sold for $130, $150, $160 or $170 – when you look at the future growth of this company and where we are going with the share price ... This deal has a long way to go.”
Potash has traded as high as about $240 a share. Doyle claims they'll surpass that if they stay independent.
Doyle is basing his assessment on demand for food in the years ahead, where he is probably right, although the time frame could be longer than expected.
In the end, no matter what he thinks, shareholders of the company will make the decision, as it appears regulatory obstacles shouldn't be a problem, although there are still some hurdles to surmount before that becomes a fact.
The bid by BHP puts a value on Potash of $38.6 billion. Doyle said in the interview that the bid was a "non-starter."
Doyle added, “When you think about this company being sold for $130, $150, $160 or $170 – when you look at the future growth of this company and where we are going with the share price ... This deal has a long way to go.”
Potash has traded as high as about $240 a share. Doyle claims they'll surpass that if they stay independent.
Doyle is basing his assessment on demand for food in the years ahead, where he is probably right, although the time frame could be longer than expected.
In the end, no matter what he thinks, shareholders of the company will make the decision, as it appears regulatory obstacles shouldn't be a problem, although there are still some hurdles to surmount before that becomes a fact.
Thursday, September 16, 2010
Potential Potash (NYSE:POT) Suitors Shrink as Sinochem Declines to Bid
The number of companies that could acquire Potash (NYSE:POT) are few to begin with, and evidently BHP Billiton (NYSE:BHP) did its homework in coming up with their bid price, as Sinochem is the latest to say they're not interested in the company based on the price and potential political hurdles.
Potash CEO Bill Doyle has made claims there are better offers on the table, but that seems to sound hollower the more the process goes on.
Major miners like Vale SA (NYSE:VALE) and Rio Tinto (NYSE:RTP) have already said they're not interested, and smaller competitor Teck Resources (NYSE:TCK) have said they haven't really even thought about it much.
There are few left who would want to put out more than the $38.6 billion offered by BHP, and it remains to be seen whether there are really any other offers that are truly better than the only one on the table.
No other Chinese companies are interested at this time either, as according to spokesman for China's Ministry of Commerce, Yao Jian, there haven't been any applications from any company run by the state concerning Potash.
For China, it isn't necessarily having the finances to acquire Potash, as somehow the funds would be made available, it's probably entering into the distracting process which would assuredly be resisted by the Canadian government for any state-run company.
So with China probably out of the way, it seems like a bare cupboard for Potash, and they may have to deal directly with BHP going forward.
It's possible a company completely out of the sector could come in and buy up Potash, but the question still remains on who would do it and why.
Slowing economic conditions are another factor, which taking on a huge debt load could crush the revenue, earnings and credit rating of a company.
If things continue to be slow economically for several years, which is highly possible, only a company like BHP could migrate through the challenges successfully and hold out till things turn around.
Potash CEO Bill Doyle has made claims there are better offers on the table, but that seems to sound hollower the more the process goes on.
Major miners like Vale SA (NYSE:VALE) and Rio Tinto (NYSE:RTP) have already said they're not interested, and smaller competitor Teck Resources (NYSE:TCK) have said they haven't really even thought about it much.
There are few left who would want to put out more than the $38.6 billion offered by BHP, and it remains to be seen whether there are really any other offers that are truly better than the only one on the table.
No other Chinese companies are interested at this time either, as according to spokesman for China's Ministry of Commerce, Yao Jian, there haven't been any applications from any company run by the state concerning Potash.
For China, it isn't necessarily having the finances to acquire Potash, as somehow the funds would be made available, it's probably entering into the distracting process which would assuredly be resisted by the Canadian government for any state-run company.
So with China probably out of the way, it seems like a bare cupboard for Potash, and they may have to deal directly with BHP going forward.
It's possible a company completely out of the sector could come in and buy up Potash, but the question still remains on who would do it and why.
Slowing economic conditions are another factor, which taking on a huge debt load could crush the revenue, earnings and credit rating of a company.
If things continue to be slow economically for several years, which is highly possible, only a company like BHP could migrate through the challenges successfully and hold out till things turn around.
Tuesday, September 7, 2010
Potash (NYSE:POT) CEO Sees More Bidders Emerging
Potash Corp. (NYSE:POT) CEO Bill Doyle said he believes BHP Billiton (NYSE:BHP) won't be the only bidder for the company, saying he's been in talks with other third parties interested in the fertilizer giant.
In a video on the company's website, Doyle said, “A number of third parties have already expressed interest in alternative transactions, some who we approached and others who initiated contact on their own."
It's impossible to tell if this is true or it's a ploy to drive up the offer of BHP for Potash. BHP has said they're bid was a good one, and have attempted to do the opposite by implying they're not going to go much higher than that.
One part of Doyle's assertion which is unconvincing is with China, which would represent the highest possibility of a competing bid. Some believe Canada wouldn't allow them to take over the company, while others have stated it's definitely something that could go forward.
Doyle added the long-term shareholders will probably ultimately decide the value of the company and whether or not to proceed with a sale.
In a video on the company's website, Doyle said, “A number of third parties have already expressed interest in alternative transactions, some who we approached and others who initiated contact on their own."
It's impossible to tell if this is true or it's a ploy to drive up the offer of BHP for Potash. BHP has said they're bid was a good one, and have attempted to do the opposite by implying they're not going to go much higher than that.
One part of Doyle's assertion which is unconvincing is with China, which would represent the highest possibility of a competing bid. Some believe Canada wouldn't allow them to take over the company, while others have stated it's definitely something that could go forward.
Doyle added the long-term shareholders will probably ultimately decide the value of the company and whether or not to proceed with a sale.
Thursday, August 19, 2010
Potash (NYSE:POT) CEO Could Collect $445.4 Million in BHP (NYSE:BHP) Deal
If the attempt by BHP Billiton Ltd. (NYSE:BHP) to acquire Potash Corp. of Saskatchewan Inc. is successful, Chief Executive Officer Bill Doyle could earn a cool $445.4 million from his stock holdings and options.
In its most recent filing of Potash, Doyle was shown to hold 3.43 million shares of the company and options combined.
The filing showed that Doyle's salary in 2009 was $1.1 million, while receiving another $1.7 million in stock and $4.9 million in options awards.
BHP circumvented the desires of Potash yesterday after being rejected, taking their bid directly to shareholders.
Most think they'll end up making a much higher bid that would be acceptable to everyone, and in that case Doyle has said they wouldn't be opposed doing a deal.
In its most recent filing of Potash, Doyle was shown to hold 3.43 million shares of the company and options combined.
The filing showed that Doyle's salary in 2009 was $1.1 million, while receiving another $1.7 million in stock and $4.9 million in options awards.
BHP circumvented the desires of Potash yesterday after being rejected, taking their bid directly to shareholders.
Most think they'll end up making a much higher bid that would be acceptable to everyone, and in that case Doyle has said they wouldn't be opposed doing a deal.
Tuesday, August 17, 2010
Potash (NYSE:POT) Shares Skyrocket by Saying "NO" to BHP (NYSE:BHP)
Shares of Potash Corp. of Saskatchewan Inc. (NYSE:POT) after saying no to a takeover bid from BHP Billiton Ltd. (NYSE:BHP), which valued the company at $38.49 billion.
Potash rose to $141.86, gaining a huge $29.71 or 26.49 percent as of 2:09 PM EDT. That brought the market cap of the fertilizer company up to 42.14 billion, calling the bid from BHP "grossly inadequate.".
The bid from BHP was a 16 percent premium over their close on Monday.
Rejecting the offer was a big plus for Potash, with investor response suggesting another higher offer could be waiting in the wings.
Major fertilizer companies moved up on the rejection as well, with CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU)and Intrepid Potash (NYSE:IPI) all jumping by close to 5 percent or more.
The jump was from the feeling the overall sector is undervalued at this time and could be poised for a breakthrough, although that must be based on the realities of demand from economic conditions and not because they're down from a tight market.
President and CEO Bill Doyle said on a conference call with analysts that he didn't necessarily oppose selling the company, but said the "timing of the proposal is highly opportunistic and an ill-disguised attempt" to push up the share price of Potash before coming in with a higher offer later.
Doyle added his is "opposed to a steal of the company."
Confirmation has come from BHP Billiton that they have approached Potash concerning entering into discussions on the matter.
Potash rose to $141.86, gaining a huge $29.71 or 26.49 percent as of 2:09 PM EDT. That brought the market cap of the fertilizer company up to 42.14 billion, calling the bid from BHP "grossly inadequate.".
The bid from BHP was a 16 percent premium over their close on Monday.
Rejecting the offer was a big plus for Potash, with investor response suggesting another higher offer could be waiting in the wings.
Major fertilizer companies moved up on the rejection as well, with CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU)and Intrepid Potash (NYSE:IPI) all jumping by close to 5 percent or more.
The jump was from the feeling the overall sector is undervalued at this time and could be poised for a breakthrough, although that must be based on the realities of demand from economic conditions and not because they're down from a tight market.
President and CEO Bill Doyle said on a conference call with analysts that he didn't necessarily oppose selling the company, but said the "timing of the proposal is highly opportunistic and an ill-disguised attempt" to push up the share price of Potash before coming in with a higher offer later.
Doyle added his is "opposed to a steal of the company."
Confirmation has come from BHP Billiton that they have approached Potash concerning entering into discussions on the matter.
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